Figure 1 shows the formula for calculating the number of subnets based on the bits borrowed from 1 bit borrowed all the way to 14 bits borrowed. For example borrowing 7 bits gets you 2 to the power of 7 or 128 subnets. Figure 2 shows the network address 172.16.0.0/23. The last two octets are in binary. The subnet mask is shown below the network address with the seven bits borrowed now as one bits. Figure 3 shows the first three subnets and the last subnet created by borrowing 7 bits. The last two octets are shown in binary.